Do you embrace, fear or ignore technological changes?
Those are questions facing the average consumer and many workers. But the stakes are higher in the answers from corporate executives in manufacturing, with implications for jobs, productivity and the nation's economy across the $5.8 trillion sector.
Many companies are not yet focused on the technology changes coming to manufacturing, according to Automation Alley's annual technology report, released Feb. 13.
"We discovered both technology and manufacturing executives lack awareness of Industry 4.0," said Automation Alley CEO Tom Kelly in the report. "And even for the companies who are beginning to transition to this new era of manufacturing, barriers to technology adoption remain. Clearly, there is much work to be done. "
One example: 52 percent of manufacturing executives have a budget and process to support new technology.
Among the other 48 percent, they "reported that the top barriers to technological advancements within their organizations are cost, uncertainty about which technology supplier has the best solution, and employees who are reluctant to change."
Beyond that, only about one-fourth of manufacturers recognized the term "Industry 4.0."
According to the study: "Industry 4.0 represents the convergence of the digital and physical technologies disrupting manufacturing: the Industrial Internet of Things, autonomous robotics, advanced materials, additive manufacturing, big data, cybersecurity, cloud computing, and modeling, simulation and visualization."
It's important for manufacturers, Kelly said, because "if you don't adopt it, you will become less efficient and more expensive than your competitors ... if you don't go down this path, won't be able to extract improvements to keep up with everyone else."
That's critical in Southeast Michigan, where the auto industry still dominates manufacturing - and where, thanks to its resurgence with back-to-back record-setting sales years, suppliers are making money, Kelly said.
Yet as the automakers and their top suppliers make advancements, particularly in prioritizing electric and autonomous vehicles, changes will roll down to smaller suppliers. What once may have been an order for a stamped metal part now may include the need for a sensor. Robotics, 3-D printers and virtual reality all may be playing a role, if they're not yet.
In Metro Detroit, about 4,600 small suppliers - representing 500 employees or less - "are trying to figure out what does this mean for them," Kelly said.
The study by Automation Alley, which is based Oakland County, will help guide the nonprofit organization as it sets up programs and connections among its members. It's already actively working on setting up eight committees "so we can dispel some of the fear," Kelly said.
Participants will come from OEMs and Tier 1 suppliers, who Kelly described "as the ultimate customers in the region. They're large enough that they know where they're going in the next three years."
Those companies are making the so-called "capital bets" in systems and technology that they'll expect their suppliers to connect to, Kelly said.
It appears to be working so far. According to Automation Alley's study, 68% of its member manufacturers reported having a dedicated budget and process to support the adoption of new technologies.
Other results from the Automation Alley report:
- 88% of national manufacturing executives believe technological advancements can be beneficial to their competitiveness. The top technologies manufacturing executives
- 85% of national manufacturing executives said their company plans to increase existing budgets for technological advancements, while nearly a third of them plan to increase their budgets by 10% to 15%.
- The top three technologies in which companies currently invest are the cloud, cybersecurity and big data and analytics.